Order comes despite government concerns that he could flee the country

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A former government official accused of selling classified documents to China was ordered free on bond Thursday despite government concerns that he could flee the country.

Kevin Mallory, 60, of Leesburg was arrested last week and charged under the federal Espionage Act. According to court documents, customs agents found him with $16,500 in undeclared cash earlier this year on a return trip from China.

Prosecutor John Gibbs said wigs, fake mustaches and other elements of disguise were found in a bedroom closet in Mallory's home last week.

"The Chinese government would have a great incentive to get him out of the country," Gibbs said.

U.S. Magistrate Ivan Davis dismissed the government's concerns, and adopted the findings of a pretrial services report that concluded Mallory could safely be released pending trial under conditions that include home detention with electronic monitoring. He also imposed a $10,000 unsecured bond.

Mallory is an Army veteran who speaks fluent Mandarin and worked as a special agent for the Diplomatic Security Service at the State Department, according to an FBI affidavit. He held a top-secret security clearance while he worked at other government agencies and contractors, and was familiar with espionage tradecraft, according to the affidavit.

A CIA spokesman declined comment on whether Mallory ever worked for the agency.

According to the affidavit, Mallory traveled to Shanghai in April, and was interviewed by customs agents at O'Hare Airport in Chicago after he failed to declare $16,500 found in two carry-on bags.

Mallory later told the FBI that he met with two people from a Chinese think tank, the Shanghai Academy of Social Sciences, that he now believes were Chinese intelligence agents. He said they had given him a special phone for transmitting documents.

According to the affidavit, Mallory told the FBI agents that the only documents he transferred were two unclassified "white papers" he had written on U.S. policy matters, for which he said he was paid $25,000.

FBI agents searched the device and found other documents and messages that Mallory thought had been deleted, according to the affidavit. In one message, Mallory wrote to the suspected Chinese agent, "your object is to gain information, and my object is to be paid."

Federal public defender Geremy Kamens questioned whether the government is misinterpreting Mallory's actions. He pointed to parts of the FBI affidavit that show Mallory reached out voluntarily to old contacts at one government agency and offered details of his contacts with the Chinese. The FBI, though, said Mallory never volunteered any information until after he was found with the cash.

Kamens said in a court motion that Mallory enlisted in the Army in 1977 and his military service, including time as a reservist, extended through 2011. According to Kamens, Mallory was stationed in Iraq in 2005 and was captured and held at a checkpoint for three days, suffering injuries that require multiple surgeries.